Maruti Suzuki India Ltd. became the first Indian automobile company to cross a market capitalisation of Rs 4 lakh crore as its shares touched an all-time high on Wednesday.
The stock's market cap rose as much as Rs 14,800 crore during the session to cross that of Tata Motors Ltd., which had the highest market share earlier at Rs 3.54 lakh crore.
Maruti Suzuki is well-positioned to capitalise on the SUV overdrive seen in the world's third largest automotive market. The company sells the highest number of compact SUVs in the country, thanks to the demand for its Grand Vitara, Brezza and Fronx models.
The company, clearly, has the highest market share among SUVs, but it's Mahindra & Mahindra Ltd.—the maker of Scorpio, Bolero and the Thar—that enjoys the highest revenue market share.
With this, the stock ranks 14th among in terms of market cap in the Nifty total market, with Reliance Industries Ltd., Tata Consultancy Services Ltd. and HCL Technologies Ltd. leading.
The stock rose as much as 3.85% during the day to Rs 12,722.70 apiece on the NSE. It was trading 3.2% higher at Rs 12,622 per share, compared to a 0.80% advance in the benchmark Nifty 50 as of 2 p.m.
The share price has risen 52.2% on a year-to-date basis. The total traded volume so far in the day stood at 1.32 times its 30-day average. The relative strength index was at 75.56, indicating that the stock may be overbought.
Out of 50 analysts tracking the company, 41 have a 'buy' rating on the stock, six recommend 'hold' and three suggest 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 4%.
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